Title: Development of an effort estimation model – a case study on delivery projects at a leading IT provider within the electric utility industry

Authors: Teodor Sommestad, Joakim Lillieskold

Addresses: Department of Industrial Information and Control Systems, Royal Institute of Technology (KTH), Osquldas vag 12, S-100 44, Stockholm, Sweden. ' Department of Industrial Information and Control Systems, Royal Institute of Technology (KTH), Osquldas vag 12, S-100 44, Stockholm, Sweden.

Abstract: When projects are sold with fixed prices, it is utterly important to quickly and accurately estimate the effort required to enable an optimal bidding. This paper describes a study performed at a leading IT provider within the electric utility industry, with the purpose of improving the ability to early produce effort estimates of projects where standard functionality is delivered. In absence reliable historic data, an estimation model suitable for incorporating expert estimates was developed. The model is based on decomposition of projects and bottom-up estimation of them, where impact of relevant variables is estimated by assessing discrete scenarios. In addition to a estimating the expected effort of a project the uncertainty of provided estimates are visualised. Together with the transparency of the model this makes it possible to analyse and refine the estimates as more details of a project are known.

Keywords: project cost; bidding; estimation models; effort estimation; delivery projects; technology management; electric utilities; fixed prices; uncertainty; information technology providers.

DOI: 10.1504/IJSTM.2010.029675

International Journal of Services Technology and Management, 2010 Vol.13 No.1/2, pp.152 - 169

Available online: 30 Nov 2009 *

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